BAROSSA SUCKS UP TO WOOLWORTHS

A commodity called discount
and a community enthralled
Barossa welcomes big pillager
by PHILIP WHITE
  

“Retailer shows interest,” blared the front page of The Leader, “the Barossa’s favourite newspaper.”

Being in the habit of reading local newspapers whenever I travel around Australia’s vignobles, I baulked at this news when I visited the Barossa to attend Peter Lehmann’s wake.

“A two day regional red wine tasting initiated by the Barossa Grape Wine and Tourism Association (BGWA) has the potential to allow more Barossa labels to be sold in alcohol retailer Dan Murphy’s,” reporter Emma Moreland wrote.

“A dinner held at Peter Lehmann Winery, Tanunda, gave producers a chance to talk with the buyers, share the story behind their label [sic] and gain valuable feedback from the group ... Mr James March, BGWA CEO, said the initiative was a chance to showcase the region and assist wineries in getting their wines on the shelves.”

Peter Lehmann Wines is now owned by the Swiss Hess family, which owns big wineries on four continents.  While Doug Lehmann still sits on the Lehmann board, no Lehmanns work at the winery these days, and it no longer insists on sticking to locally-grown grapes.

Dan Murphy’s is Australia’s biggest liquor discounter.  It is owned by Woolworths, which also owns the BWS chain, and the vast Barossa winery, Cellarmasters, also known as Dorrien Estate.

Through its subsidiary Vinpac, Woolworths is also Australia’s biggest contract wine bottler, meaning it gets the chance to sample and analyse vast numbers of wines made legitimately by the thousands of small producers who cannot afford their own bottling lines and who don’t necessarily sell their wine through Woolworths.  I have written here before that through this tentacular grasp of Australia’s wine, Woolworths owns an intelligence-gathering network which would make the Mossad envious.

Woolworths makes good friends in the Barossa by permitting many small producers – “artisans”, they call themselves - to make their wine in its giant wineries.

At the other end of the story, Woolworths also owns Langton’s, Australia’s biggest wine auctioneer.  Langton’s is famous for its “classification”, a formal ranking of Australia’s wines based on their tertiary prices at auction. Penfolds Grange is always at the top, giving the appellation great weight.  While Woolworths is the biggest seller of Grange, and through Langton’s boasts of the great profits the wine can bring on this tertiary market, it drives Penfolds nuts by discounting Grange upon its release.  The current vintage, the 2008, was released with a recommended retail price of $785, but Woolworths was soon selling the wine at $645.

Cellarmasters is in the business of producing wines which are packaged to look like they are made and packaged by small family outfits.  When a small private firm is in difficulty, for example, the Woolworths man will suggest a joint venture.  His mob will borrow the artwork from the struggler’s brand, modify it slightly, put it on wine bought from that producer at a bargain rate, or other wine made in Cellarmasters, and sell it by direct mail, or exclusively through Dan Murphy’s or BWS as if it came straight from the original struggler.  None of this wine ever carries a label which explains it is in fact made and packaged by Woolworths.

Most of the wine you see on the floor of a big Dan’s store is made and packaged this way.  While the front of the shop might stack some real wines with honest labels, made by the folks who purport to have made it, such wine is often bought by Woolworths at the standard wholesale price, but then sold below-cost, simply to get the punters through the door.  These wines are called “loss leaders,” and trash that producer’s ability to maintain a fair price in the rest of the market.  

 
Once you’re past them, and you’re lost in the ponderosa within, you’re really trapped in avatar land, with hectares of wine made by Woolworths themselves, dressed as if it were made by the equivalent of the poor honest John whose impossibly cheap wine you’ve just walked past.  But in here, in these miles of aisles, you may imagine the ivy hanging over bluestone cellars in some shady Barossa lane, but there’s no imagining in the profit division.  Woolworths makes its millions in this, the biggest part of the store.

“Peace of mind with our home tasting guarantee,” the current Cellarmasters propaganda trumpets. “Every wine you receive has achieved a medal-winning equivalent score from our expert tasting panel, using Australian Wine Show judging criteria.”

The Leader story ran beside a photograph of a proud Jason Schwarz, of the tiny Barossa producer Schwarz Wine Company.  Schwarz sales and marketing man, Nathan Gogoll was quoted as saying “So many people are buying wine in Dan Murphy’s and if a bottle of Schwarz wine is in so many of those different spots … there’s exposure for a little brand like ours that’s emerging and growing.”

Gogoll admitted that the wine “may not be sold at a high price.”

James Lindner, of local hero Langmeil Wines, owners of the world’s oldest Shiraz vineyard, The Freedom, was also quoted.

“It helps the Barossa through their third party endorsement,” Lindner said of Woolworths.  “It helps the wineries they support sell some wine and helps the growers these wineries support sell their grapes.”

So before I went off to raise a glass in memory of the great Peter Lehmann, the hero of the small growers of the Barossa, I stood there shaking my head in the newsagency.  In the valley that boasts of its dedication to its peasant-scale grapegrowers, its fine local produce and its Slow Food movement, the valley which would not even permit a McDonalds to open in the industrial zone of Nuriootpa ...

The valley which now seems proud to be just another outpost of the Woolworths liquor empire; the centre of a business dedicated to selling, not premium wine, but that brave new commodity called discount.